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Power Generation Programmes & Concerns for Climate Change, Shri R V Shahi, Former Secretary, Ministry Of Power

Power Generation Programmes & Concerns for Climate Change

Monday, July 02, 2007


India's power sector profile is predominantly characterized by coal based thermal power generation. Even in next 20-25 years, continuing dominant role of coal for power generation cannot be ruled out, though its overall proportion, which is close 60% of the total capacity, may marginally go down. It is in this context that the debates all over the world on the recent report of IPCC become highly relevant for India. We are, and we shall continue to be, under pressures, technically, professionally and above all diplomatically to keep a watch on our expansions based on fossil fuels. On the 4th of May 2007 the Inter-governmental Panel on Climate Change (IPCC), an organization set up by the United Nations published the third installment of its fourth report. This body was set up under the aegis the United Nations to generate consensus on issues concerning global warming and climate change. It has been making studies, organizing discussions and submitting reports. What is different in this latest report is that it clearly articulates that climate change may threaten the mankind, but there is a good chance of averting the crisis if appropriate actions are put in place.

As soon as this report came out, it got spread like a wild fire all over the world. In India, a leading daily, the Times of India covered it on the first page as the front line lead "Now or Never: just eight years to fight global warming" and highlighted the drastic steps which were needed to check climate change by both developing and developed countries. The Indian Parliament, which was in session, decided to hold a full day debate on this issue on May 8. The Economic Times of May 5, 2007 emphasized with headlines "World has eight years left to save climate, says UN report". The paper emphasized that the report had focused on the economic implications and technological options for tackling global warming and stressed that emissions must start declining by 2015 to prevent the global temperature to rise more than 2 degrees Celsius over pre industrialized temperatures. In last six weeks, series of news items, analytical reports and articles have appeared in important dailies and magazines in India and abroad. Some of the headlines are indicative of the gravity of concerns that are being perceived and projected. The Times of India May 6, 2007 put a heading "Melting Glaciers could lead to a flood of troubles". It reported that unless we acted right now most Himalayan Glaciers would melt by 2030. Till 2030 there would be a steep rise in water levels of glacier fed rivers, which would cause major floods. Agriculture in the Indo-Gangetic plains would be badly hit. Apart from water shortage, soil quality may also deteriorate. Hydro electric projects, being served by Himalayan Rivers, may be a big causality. While these reports highlight the major ill effects that may lead to the problems of the types mentioned, it also appears a consensus all over that if appropriate remedial actions are put in place, the problems, to a great extent, could be tackled.

A few internationally reputed journals have also adequately covered the IPCC report and have tried to present the critical analysis. The Economist of May 18, 2007 has carried two important write ups. The one captioned "Global warming in Africa, drying up and flooding out" has underlined that "Rich countries may be largely to blame for adding climate change to Africa's problems..." and the report has quoted the statement of Uganda's President, who declared "Climate change an act of aggregation by the rich world against the poor one and demanded compensation". He went on to the extent to suggest "the moral arguments on climate change are even murkier than arguments about other wrongs done to Africa, such as slavery". The other write up in the Economists brings out "subsidies for clean energy are rising. George Bush, uncomfortable with anything that looks like a carbon tax and happy to pass round the pork, has been throwing money at companies investing in clean energy, some European countries, such as Germany, have outdone him in their hurry to give tax payer's money to renewable. Economist are uncomfortable with such measures, because history suggests that governments are bad at picking winning technologies..." Indeed there is considerable weight in the argument that government subsidies seldom fructify into any stabilized situation of effective technology development. A good financing plan could prove better.

Carbon Tax has been suggested as a strategy for reducing and controlling Co2 emission. There are two schools of thought: one says that technologies, which will reduce Co2 emission, are costly and if these technologies have to be brought to the market then cost of generating power from fossil fuels has to increase. This can be done by taxing fossil fuel generation and putting that money to subsidize the technologies which are costly. Another school of thought has an opposite view. It says that the countries like India, which are far behind in respect of power generation and consumption, are in dire need of substantially increasing their power generation at lesser cost. Any carbon tax or such other cess is likely to only increase the cost of power further. This would put the developing economies at a disadvantage and would impede the process of growth in manufacturing, and affect overall employment potential. One of the requirements of manufacturing to be competitive is availability of cost effective electricity. Even the Economist (12th July 07) has noted "whether America would accept a price on the level IPCC envisages remains far from clear. Another big uncertainty is how the developing world, wary of anything that would limit its entitlement to grow, could be persuaded to buy into this idea". A major argument that is being advanced - and there is considerable weight in this - is that countries like India will have to depend on its local resource viz coal. All that this tax will do is to increase the cost of power, it will do little to reduce the use of coal.

One thing is very clear. No country in the world has set out any definite plan of action. A few European countries have done comparatively better. There is considerable confusion about the strategy and action almost everywhere. The latest Economist of June 16, 2007 has again brought out analytical piece on climate change with the caption "Despite the President's change of heart, the carbon policy remains contentious". It goes on to say "Ask Washington Pundits about America's future policy on global warming, and most of them will tell you that things are changing too quickly to make firm predictions".. The whole world is looking at relative contribution of different countries to this problem and also at the relative obligations toward both preventive and curative actions. For the first time, way back in 1997, the whole world discussed and agreed on what is now famous as Kyoto Protocol. This Protocol established the principle of differentiated responsibilities. It set the target for reduction of green house gases by countries which are now called ANNEX-I countries. During the first commitment period of 2008 - 2012, the targeted reduction was a total of 5.2% below their aggregate 1990 emissions. India is one of the Non-Annex-I countries and therefore, it did not have any obligation or commitment for Co2 reduction. The principle of differentiated obligation was accepted because developing countries like India have been far behind in the matter of levels of energy consumption. These countries needed to step up their energy production. There has been some talk in India also about carbon tax. In fact, there is a case for "carbon revenue" rather than "carbon tax". We should motivate power generating organizations to slowly resort to more energy efficient technologies and if the level of emission is less than at present they should be incentivised. This will have a dual advantage - a clear shift toward efficient technologies and efficient operation, and at the same time incentive to them could reduce the price of power. A study has been conducted which brings out that within certain range, the extent of co2 reduction is practically insensitive to the increase in carbon taxation. Even a 50% change in carbon tax leads to only 1.5 to 2.5% reduction in Co2 emission. A detailed article in the Economic & Political Weekly (June 16, 2007) provides full data on this conclusion.

Two large countries namely India and China have to inevitably depend on massive use of fossil fuels, mainly coal. Development of China in last 25 years to a very large capacity base of more than 4,00, 000 MW, most of these based on coal, has taken care of their requirement by and large. India, though needed similar expansion, could not do so because of variety of reasons. But the fact remains that India has to catch up and effect the expansion of power generation base on similar lines. This should take its capacity from 135 GW to 800 GW in next 25 years.

Recently, the climate change issue was an important agenda in the G-8 Summit in Germany. India's position in the summit, as very well articulated by the Prime Minister Dr. Manmohan Singh, was on predicted lines. The thrust of India's argument can be summarized as (a) Priority on poverty eradication requires growth and development; India does give due importance to environment, but development needs to be encouraged, (b) India's per capita emission is about 20% of world average, (c) Several measures of energy efficiency have been taken and further they are being intensified, (d) Renewable Energy systems are being encouraged in a big way, (e) Developed countries, which have contributed to this problem over the years should transfer clean energy technologies to others.

These are valid and strong arguments. While we need to pursue this line of approach, perhaps our response to this major global concern could be structured on following lines to appropriately reflect our commitment toward environment and climate.

  1. Project management approach on mini / micro hydel projects through both - by public sector and public-private partnership.

  2. Full exploitation of Hydro electric potential in next 15-20 years.

  3. Bio- mass technology, using the economy of scale, nay be supported by government to make it cost effective.

  4. Decentralized Distribution generation system for rural areas.

  5. More efficient thermal power generation technologies e.g. supercritical system - all future power plants of 1000 MW or more should deploy this technology. Mega Project benefit could be linked to this. A "carbon revenue" scheme, as discussed in this paper, could also be considered.

  6. Clean coal Technology Mission to focus on this with specific targets and action plans.

  7. Gradual retrofitting of new technologies in old plant.

  8. A large Research Fund may be set up for solar system to be made a more cost effective technology for its deployment extensively.

  9. A few factories to produce CFL systems for large market penetration will lead to visible reduction in lighting power requirements.

  10. LED has significant potential and relevance - A pilot plant followed by a large manufacturing facility may be facilitated.

  11. With the above, power generation capacity profile could present a mix on which in next 25 years, non conventional should be at least 10-12%, hydroelectric (which is also renewable) at least 35% inclusive of hydropower from Bhutan and Nepal and nuclear at least 6-7%. On efficiency in consumption a target of 15% could be achievable. These together would present a solid and convincing response of India on this issue.

  12. Over the years, India's laws, rules and regulations have been strengthened. With several agencies for their enforcement, which have been put in place, compliance has also improved. This process needs to be encouraged. If there are loop holes we need to address them. In a comprehensive paper, published in the leading daily the Hindustan Times (July 2, 2007) several critical comments have been made on India's position on climate change as also India's track record on environment. While many of the points made in this article can and should be questioned on the basis of facts, I do support that industry must take all possible steps to not only comply with laws and rules on environment, but should go beyond toward environmental protection and ecological balance.